Tuesday, November 25, 2008

Frank Pasquale on Thomas Kinkade's apparent attempt to establish broad intellectual property rights "over a style and manner of painting and image-crafting": "It's a tricky legal question as to what critical mass of stylistic detail in a Kinkade painting is enough to warrant copyright protection when another is inspired/corrupted by it."

"MOCA has received a letter from the California Attorney General's office. The California Attorney General has broad jurisdiction and oversight over California non-profits, including MOCA. The letter requested information and documents related to the Museum's finances. MOCA is fully cooperating with the Attorney General."

"A New York art gallery owner was nabbed Friday for commissioning dozens of knockoffs of Matisse, Calder and others that he passed off as the real thing. Giuseppe Concepcion was arrested in Florida on charges of trafficking in phony artwork and scheming to dupe clients, Manhattan federal prosecutors say. Concepcion owns the Proarte galleries in New York and Miami. The feds say Concepcion purchased authentic works of art by Henri Matisse, Alexander Calder, Tom Wesselman and then commissioned forgeries he sold to victims, complete with bogus documents verifying their authenticity. In August 2005, Concepcion sold a 1969 oil painting by Calder to a Greenwich, Conn., man who gave Concepcion his 2004 Bentley as partial payment for the $180,000 price tag, FBI Special Agent James Wynne said in legal papers filed yesterday in Manhattan Federal Court."

Thursday, November 20, 2008

Regarding the recent decision discussed here, Josh Baer wonders how it's possible that the Basquiat Authentication committee could possibly have told Christie's to pull the work from auction in 1990 when the committee wasn't formed until 1994. I haven't seen the complaint, but, in the Judge's decision, the issue is finessed by describing the allegation to be that "two members of the Basquiat Committee had previously viewed the Painting" -- in other words, two people who would eventually become members of the Committee, though, the Committee not yet having been formed, they were not members at the time they viewed it.

A couple of weeks ago, I mentioned that Sotheby's had announced that it was done with guarantees. Now Christie's too says it will "for the most part, give guarantees only in 'exceptional circumstances'" . . . and also announced it will "not be rebating any of the buyer's fees back to the seller."

Felix Salmon has an amusing take on the latter announcement: "I wonder whether [Christie's chief executive] Edward Dolman is one of those people who, long after they've left home, casually drop into a conversation with their parents that they've stopped smoking cigarettes -- having never admitted, in the prior years, that they were smoking cigarettes. ... Until today, I've never seen anybody from Sotheby's or Christie's admit that the seller's commission -- which has always been negotiable -- might ever have been negotiated all the way down past zero and into rebate territory."

He adds that "you can be sure that if and when the market starts heating up again, the auction houses will restart [the rebate practice]."

Monday, November 17, 2008

There was a decision earlier this month in a NY state court case that could have far-reaching implications for the auction houses.

In 1990 Tony Shafrazi Gallery bought a Basquiat painting at Christie's. In 1991, Shafrazi sold the work to collector Guido Orsi. Fifteen years later, in 2006, Orsi was told by the Basquiat Authentication Committee that the work was a fake. Shafrazi and Orsi brought suit against Christie's on a variety of theories, including fraud (they allege that two members of the Basquiat Committee had viewed the painting just before the 1990 auction, "determined that [it] was 'not right' and requested that Christie's withdraw it from the auction").

The court has now dismissed all of the gallery's claims on the ground that it didn't suffer any damage: since it was able to sell the work to Orsi, it has nothing to complain about. It also dismissed all of Orsi's claims on statute of limitations grounds . . . except for the fraud claims. There's no discussion of the statute of limitations as to those claims, but presumably they survived because the fraud wasn't discovered until 2006 (the suit was filed in 2007). But the more interesting fact about the case -- and the reason for the potentially far-reaching implications -- is that Christie's did not sell the work to Orsi. In sustaining the claim, the court seemed to rely on a kind of "fraud on the market" theory:

"Plaintiffs allege that when Shafrazi sold the Painting, he described it as 'Purchased from Christie's Contemporary Art ...' Plaintiffs have submitted affidavits to the effect that art purchasers rely on the expertise of a prestigious auction house such as Christie's, which they term a 'market maker,' and that when Christie's provides a warranty concerning the authenticity or provenance of a painting, the custom and practice of the art industry is that the provenance of the work of art has been firmly and permanently established. Plaintiffs allege that Orsi purchased the Painting, relying on Christie's representations. If, as plaintiffs allege, Christie's fraudulently misrepresented the Painting's provenance, and published that misrepresentation in its catalogue, which Christie's could reasonably anticipate would be relied upon by bidders at its auction, as well as subsequent purchasers, it may be liable to those who relied upon its misrepresentation" (emphasis added).

Now, in this case, it happens that there was only one degree of separation, and about a year's time, between Christie's sale and the sale to Orsi. But by the logic of the court's decision, any subsequent buyer -- no matter how remote in time, and no matter how many intervening transactions have occurred -- could potentially bring a fraud claim against an auction house as "market maker."

Monday, November 10, 2008

Sergio Muñoz Sarmiento spots another case of "institutional censorship and curatorial alteration," this time in New York: "After complaints to the city Buildings Department, and concern from the Urkainian community in the East Village, Cooper Union removed a giant banner with a reproduction of a Picasso drawing of Joseph Stalin" that had been put up by Norwegian artist Lene Berg. As Sergio points out, the case is reminiscent of a similar incident at UCLA last month.

From a VARA point of view, the issue seems to be whether the banner was one element of a single, larger work of art (in which case its removal would seem to be a distortion or modification of that larger work) or, instead, was one work in a multi-work exhibition (in which case it would probably not be a VARA violation, though it may well still be wrong). It's not quite clear from the news report. The lede says Berg "included the banner as part of her one-woman art installation," but a statement put out by the school notes that "the gallery component of the show — two videos and two book projects — ... will be closed until further notice." The School of Art's website has also been describing it as "an exhibition" (rather than "a work").

Thursday, November 06, 2008

In the Halsey Minor-Sotheby's litigation, the parties are skirmishing over whether Minor's separate class action lawsuit in California can proceed, but, in their most recent brief, filed earlier this week, Sotheby's gets in a few jabs on the substance (all citations omitted):

"Minor argues in conclusory terms that 'because Sotheby’s employs a disclosure standard that contravenes the mandates of New York City’s auction house disclosure law, Minor has sought redress for this systematic violation on a classwide basis.' However, Minor pointedly ignores Sotheby’s discussion [in their previous brief] of 'New York City’s auction house disclosure law.' As we discussed, the New York City department of Consumer Affairs – the agency that promulgated and administers the City’s 'auction house disclosure law' – has determined that Sotheby’s 'disclosure standard' is in full compliance with that law. Minor cannot dispute that this agency determination should be enforced in accordance with well-settled law."

Monday, November 03, 2008

The Boston Globe's Cate McQuaid has the story of painter Nick Lawrence, who in 2004 "stopped by his studio at the Boston Center for the Arts and found that 20 years' worth of paintings and works on paper, totaling almost 1,200 works of art, had gone missing." Apparently the BCA determined the works were in violation of a fire code and, when Lawrence did not respond to a fire abatement notice (he says he never got it), they just moved it all, including some to "an unsecured shed out back." Some of the works went missing; others were severely damaged.

Lawrence is also an art dealer, so was lucky enough to have insurance in place -- "a blanket policy for all the art in my possession. Mine, and anyone else's." But "to get his insurance payout, he was first obligated to sue the BCA, in order to determine liability. He settled with the BCA right before Christmas last year, for $150,000. ... After settling with the BCA, Lawrence and his insurance company had to agree on the appraised value of his work. ... Appraisers for each side disagreed, and the dispute went to mediation. The case was ultimately settled in June, when a court-appointed mediator had the insurance company pay Lawrence $950,000 for his loss. That's a total of more than a million dollars in compensation," though he notes that "five years of legal fees and other costs associated with the lawsuit and insurance claims took a chunk out of the award even before he had the money in hand."

A while back, I noted that the London police were recruiting art historian-types to form a volunteer art squad. Now, The Art Newspaper has a report "on how this innovative scheme is working."

Derek Fincham comments: "This seems to be a good idea generally, and if it helps the Arts and Antiques Unit, that must be a good thing. But its no substitute for an open and honest market in art and antiquities."